Contract Logistics

Automation and new technologies open doors to new opportunities for efficiency gains, also in contract logistics. At the same time, they significantly speed up the pace of change. Worldwide e-commerce accounts for almost 20 percent of retail sales, bringing about a massive transformation in operational processes. In parallel, the complexity of the supply chain is increasing at an exponential pace.

Kuehne + Nagel, the world’s number two in contract logistics, has always been a pioneer in automation and technological development. In order to guarantee its contract logistics customers the best services also in the future, the company focussed its investments in this area in 2018. The largest single investment was a new global warehouse management system – a state-of-the-art platform for the company’s more than 400 fulfilment centres worldwide, which was launched successfully last year.

In contract logistics, the company strengthened its technological leadership with two newly commissioned Innovation Centres in Singapore and Utrecht. To manage supply chains even more efficiently, Kuehne + Nagel undertakes joint research with customers and other partners into innovative technologies, such as data analytics, the Internet of Things and new picking technologies.

In 2018, Kuehne + Nagel achieved record numbers in net turnover and gross profit in its contract logistics business unit. The business volume grew significantly in the USA and Asia, where growth rates of more than 40 percent were achieved in e-commerce fulfilment. Due to the review of the project portfolio and the investments made, EBIT remained below last year’s figure. Driven primarily by growth in the pharma & healthcare industry and in e-commerce, Kuehne + Nagel increased the managed warehouse space by about 1 million to 11.6 million square meters.

Asia as a particularly attractive growth market, was the focus of two Kuehne + Nagel acquisitions, which underpinned not only its position as a leading international logistics service provider for China’s automotive industry, but also its e-commerce offering in Indonesia, the most important internet market in Southeast Asia.

Kuehne + Nagel also achieved record numbers with its integrated logistics business. Once again, a success factor proved to be the company’s ability to offer its customers the greatest possible transparency and optimisation along the entire supply chain. Key to this is the global network of nine control towers which in 2018 was expanded by a new one in the Colombian capital of Bogotá. Kuehne + Nagel uses this network to manage its innovative end-to-end solutions that are jointly offered with the company’s other business units.